One of the many problems with bitcoin is that regulatory policy is still developing, and it is individuals like William Green that will always require cryptocurrency never stray far from the very governments they seek independence from.
Unregistered Bitcoin Exchanges Are Illegal
William Green, a New Jersey resident, was indicted by a federal grand jury because he operated an unlicensed “money transmitting business”. He converted $2 million worth of money into bitcoin.
William Green’s website, “Destination Bitcoin”, would take money from people, deposit their cash into his bank accounts, convert it to bitcoin, and transfer it back. He’d make money by collecting a fee.
That’s a no-no. Destination Bitcoin and all exchanges must be registered with the government to engage in these transactions. William Green and Destination Bitcoin failed to do so. Not only that, William Green had already been charged for the same crime in February.
It doesn’t seem like it should be such a big deal.
Yet the feds are taking these transactions with deadly seriousness, considering the FBI, Homeland Security, the IRS, and U.S. Immigration & Customs Enforcement were all involved in the investigation.
If convicted of running an unlicensed money transmitting business, William Green and Destination Bitcoin could be hit with a maximum penalty of 5 years imprisonment and quarter-million-dollar fine.
Cryptocurrency bulls love to talk about how bitcoin isn’t connected to fiat currency, and how wonderful it is that it provides “anonymity and privacy”, and “independence from political agents” like central banks, and de-centralization.
It sure doesn’t look like any of those arguments hold up based on this situation, making bitcoin the sucker’s bet I’ve been saying it is.
For starters, bitcoin is absolutely connected to fiat currency. Its value is expressed in fiat currency! Its value is psychologically tied to the amount of fiat currency one can buy or sell it for, not for the amount of guns, ammo, rocks, food, water, or shelter one can get for it.
And it sure seems like William Green will be paying his fine in fiat currency.
Clearly, there was neither anonymity nor privacy involved for the individuals who exchanged their fiat currency for bitcoin, nor for William Green, considering the feds knew whom to indict and arrest.
The same goes for any independence from political agents or centralized governments, considering the four federal agencies that joined forces to hunt William Green down and shut down his operation.
The Feds Will Never Let Bitcoin Be Truly Free
This indictment is clearly linked to what Treasury Secretary Steven Mnuchin said just ten days ago in his surprise press conference: that the federal government will crack down and halt any criminal activity that uses cryptocurrencies for payment.
That includes shutting down exchanges that are not registered in order to prevent such criminal activity.
This indictment is just another example of why bitcoin is simply a fantasy and speculative frenzy, with nothing logical or factual standing behind it, and worth nothing more in the long-run than tokens at Chuck E. Cheese.